Research On The Impact Of Host Country's Trade Policy Uncertainty On China's OFDI

In the post-economic era,accompanied by introverted policy orientation and protectionism,there has been a sharp increase in uncertainty in international trade policies.Meanwhile,geopolitical conflicts and internal political conflicts in some countries and regions have also exacerbated the uncertainty.However,China's OFDI has the characteristics of "counter-economic cycle".In this context,this paper studies the influence mechanism of host country trade policy uncertainty(TPU)on China's OFDI,based on the present value theory of expected returns.Taking the comparative returns of cross-border investment of enterprises with respect to domestic investment and the probability of success of cross-border investment of enterprises as the core of the theoretical model,two basic mathematical model formulas are constructed and the theoretical model is extended.Based on the data of 181 countries from 2005 to 2016,after the PSM analysis,the system GMM estimation method was used for empirical testing.The study found that the scale of OFDI in China has a positive correlation with the level of TPU in the host country.Further,through the comparative study of the TPU index,it is easy to find that if the TPU of the host country is becoming higher and higher,the impact of TPU changes will also become stronger and stronger on China's OFDI;the closer the trade relationship between the host country and the home country,the stronger the influence of TPU on OFDI,to be specific,countries with closer trade relationship with China will have greater impact on China's OFDI than countries with less close trade relationship;in addition,the uncertainty of the host country's trade policy will have a regulatory effect on China's OFDI.The conclusions of the article can help to provide reference for the research related to the host country's trade policy,and provide reference for the formulation of relevant foreign investment policies.